An administrative penalty (“admin penalty”) is a penalty levied under section 210 of the Tax Administration Act (TAA). The TAA prescribes the various types of non-compliance which are subject to fixed amount administrative penalties.
Incidences of non-compliance subject to a fixed amount penalty:
Individuals (Personal Income Tax) –
From 1 December 2022 if a natural person failed to submit an income tax return for years of assessment from 2007 onwards when that person has one or more income tax returns outstanding.
Companies (Corporate Income Tax) –
Penalties will be imposed where the company has failed to submit an income tax return as and when required under the Income Tax Act for years of assessment ending during the 2009 and subsequent calendar years, where SARS has issued that company with a final demand referring to the public notice and requiring the submission of the outstanding income tax return, and the company failed to submit the return within 21 business days of the date of issue of the final demand.
Top Tip: Regardless of whether you agree or disagree with the admin penalty it is advisable to submit the outstanding return to stop further admin penalties. The penalty will reoccur for every month the return(s) remains outstanding for a maximum of 35 months.
The administrative non-compliance penalty for the failure to submit a return comprises fixed amount penalties based on a taxpayer’s taxable income and can range from R250 up to R16 000 a month for each month that the non-compliance continues.
Administrative penalties recur each month that the taxpayer is non-compliant, up to a maximum of 35 months. Each recurring penalty will have a unique transaction number.
From SARS Website